Baidu is starting up a department to compete head on with Alibaba’s Taobao in the consumer to consumer market. 

This looks suspiciously like some red meat for its shareholders rather than any promise on this.  However it could be an admission that Baidu desperately needs to monetise its traffic.  Having more than 50% of the search market is all well and good, but who’s ever seen a value per user?

This is a very odd report:

 http://www.pandia.com/sew/549-china.html

Chinese ISPs are redirecting searches made on Google Blogsearch and other search engines to the Chinese search engine Baidu.

It’s not the Chinese government, but the Chinese ISPs.

The BBC report that Baidu is now number 3 in the world, ahead of MSN.  I wonder where they would be on profitability?

We have got some attention from Asia Business Media, which is nice.  The whole point is that the Chinese audience may or may not have money, but they don’t have credit cards - and that’s the key when you need online payments.  Google’s audience is more likely to have credit cards

One of the things that this blog has been saying for some time is that (1) Baidu is going to expand its market share rather than decline and (2) Google is a good bet because it has richer users.

Well the China Internet Network Information Center (CNNIC) has come out with another survey showing just this.

Baidu is up again to 74.5% of the search engine share.  Although this looks close to the peak, we have reason to believe that the market share will still increase.

However the interesting story is Google.  TradingMarkets.com report that among educated, older and more prosperous users Google is almost drawing even - which would start to explain why their return on investment tends to be higher than Baidu.

Another post by our colleagues at SEO4China shows a similar story with a reasonably strong showing by Google in tier one cities, average in tier 2 cities and nothing in tier 3 cities.  (They also pick up the importance of the high earners).  Now as the internet goes more blue collar and rural over time, this could mean that Google will lose even more market share.

The problem for Google is that they are simply not prepared to become like Microsoft in the UK or US, a good return on investment but not the market leader.  As we’ve said before, a little less chest beating and more bean counting will do Google well.

The Chinese government has read the riot act to the search engines, again.  At least in public they seem to be keeping quiet about the political angle, concentrating on decency instead.  ”The search engines know what they should do” said the official…

It’s interesting that this news story is appearing on a Chinese website (even if it is in English)  and it purports to be from the Shanghai Daily.  The tone of the article, although not full of the Western denunciations of censorship, is still interesting for the fact that censorship is mentioned.

Google is at last getting some good news in China, the stock market analysts are declaring the battle with Baidu to be over, with Google the loser.  Considering their track record, should I be changing my predictions of continued Baidu dominance?

Baidu is sort of in Japan already, and is going into Japan a bit more.  I suppose its better than going for Europe.

 Japan is one of the few internet markets where Yahoo! is dominated.

Not quite search marketing, but foreign money is still inflating the Chinese market.  Massive advertising company WPP has bought into MySpace China.  Rupert Murdoch’s News Corp allowed this site to develop almost from scratch.

Google desperately wants to break into China.  Google only finds itself falling behind Baidu, at least relatively.  Instead of trying to make their pile in China they are obsessed with being number one. 

Now Eric Schmidt is angling to get the American government to intervene, calling Chinese net censorship a trade barrier.  Then the plan is for the American government to intervene against Chinese imports.

This is mad for two reasons.  Firstly Google could harm American citizens through their special pleading, and these American citizens - even in these protectionist times - may not appreciate this. 

Secondly countries and societies have a perfect right what they wish to restrict.  Google doesn’t like gambling and gun sites, which is commendable.  Almost no country will allow certain types of explicit images - and prosecute people to the ends of the earth for offering or even viewing these.  The American government stops free speech with British gambling sites.

China is no different.  More repressive, yes.  But national sovereignty means that things such as net censorship are rightly the matter of the governments.